The Government has defended the upcoming change to the certificate of entitlement (COE) system, saying the use of engine power to differentiate mass-market cars from luxury models allows for better rule enforcement and compliance.
The new COE rules, which will take effect next February, stipulate a capping of brake horsepower for Category A cars at 130bhp on top of the existing requirement that limits the engine capacity of these cars to 1,600cc.
Transport Minister Lui Tuck Yew said yesterday: "We have chosen something which I believe is more simple, more stable, easier and more straightforward to implement and to police." Since the announcement on Monday last week, some have asked why open market value (OMV) or carbon emission was not used instead of engine power to differentiate luxury and mass-market cars. Mr Lui said the authorities had considered "very carefully" the use of OMV as a parameter.
But he said the value is subject to fluctuations due to factors such as currency movements and cars of different origins.
"We wanted to avoid some of these oscillations between Cat A and Cat B, and some of these implementation issues where using OMV as a criterion could make it very confusing, very complicated," said the minister. As for using carbon emission as a yardstick, Mr Lui said the authorities "deliberately decided not to conflate environment issues" with the goal of improving social equity within the COE system when deliberating on the change.
Mr Lui also commented on the latest COE bidding exercise that saw premiums rising by as much as 11 per cent, which analysts have attributed to the rule change. The minister said such fluctuations were "expected" and that it will take several bidding cycles before prices stabilise.
He was speaking at his ministry's Family Charity Outreach event at S.E.A Aquarium, where he presented a $1 million cheque to Community Chest.
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